Let us begin by talking about palm oil prices. In the last month, there has been 11% rise. What is your outlook as to where prices could potentially be headed?
Nadir Godrej: Palm oil prices had risen quite a lot. They were expected to rise because they were quite low and there was a lot of demand and high production of other oils such as soybean oil and sunflower oil. But now the palm oil prices have reached the level expected and we do not really expect any further big increase. Of course, there will be small fluctuations, but generally speaking we expect fairly steady prices for quite some time.
You have also been reporting double-digit sales volumes in cattle feed as well as aquafeed segments over the last few quarters. What is the outlook now going forward in terms of CAGR growth?
Nadir Godrej: Outlook for these two segments are good, especially for cattle feed. We have a lot of premium cattle feed products now. We have done a lot of R&D in cattle feed, which is showing good results. Our products are being well received. They are more efficient products. So, with less feed, you get better milk yield and therefore they are more sustainable products also because you can produce milk with lower carbon emissions.
What about the animal feed segment because after muted margin performance for the last few quarters, do you think margins can rebound soon?
Nadir Godrej: Our margins will be a little better and because of the high quality of our feeds, we expect the margins will be quite good.
With the onset of the hotter than expected summer, are we going to see an impact on feed prices?
Nadir Godrej: The hot summer could affect prices a little bit. But I am not particularly worried. And the general expectation is the monsoon will be good and that will be an even bigger factor. Of course, the very hot weather will increase demand for things that are consumed in hot weather, like soft drinks and ice cream and so on. There could also be health problems if the hot weather is very high. But with climate change, this is to be expected. Fortunately, the projections for the monsoon are fairly good because the El Nino seems to be ending.
What is your outlook on the dairy segment? Will growth in the value added products aid the dairy segment growth going forward?
Nadir Godrej: Cream line dairy is doing quite well as we have more and more value added products. The margins for the value added products are good and we are seeing a fair amount of traction.At an aggregate level, what is the outlook for the year, given that the first half of the year is just starting and the expectation is that there is going to be a good monsoon as well?
Nadir Godrej: I do not want to make any forward-looking statements, but generally with a good monsoon, the agricultural situation should be good for all agri businesses.